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Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Brian Roy
v
SNC-Lavalin Australia Pty Ltd
(U2013/7768)
SENIOR DEPUTY PRESIDENT
RICHARDS BRISBANE, 30 SEPTEMBER 2013
Summary: unfair dismissal remedy - jurisdictional objection re genuine redundancy - whether
redeployment to overseas position was reasonable in the circumstances - s.389(2) - tension
between reasonableness of redeployment (s.389(2)) and whether redundancy exemption
available for reason of “acceptable” alternative employment (s.120).
[1] Mr Brian Roy, the Applicant in this application made under s.394 of the Fair Work
Act 2009 (“the Act”), performed duties as a Brisbane-based Senior Designer - Mechanical for
SNC-Lavalin Australia Pty Ltd (“the Respondent”) until his dismissal for reasons of alleged
redundancy on 1 March 2013. The Applicant had performed the above role with the
Respondent since 28 February 2011.
[2] Given the above, the Respondent moved a jurisdictional objection to the application
proceeding. That objection was based on s.389 of the Act, with the Respondent claiming that
the Applicant had been subject to a “genuine redundancy” as defined in that section, and as
such was not a person (in effect) who was protected from unfair dismissal for purposes of
s.385(d) of the Act. If this were made out, the Applicant’s application for an unfair dismissal
remedy under s.394 of the Act would not be jurisdictionally competent.
[3] Evidence and submissions were taken in respect of both the jurisdictional objection
and the application for an unfair dismissal remedy. There is, of course, a significant overlap in
respect of the facts relevant to the two matters.
Jurisdictional objection - s.389
[4] Section 389 of the Act provides as follows:
389 Meaning of genuine redundancy
(1) A person’s dismissal was a case of genuine redundancy if:
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DECISION
E AUSTRALIA FairWork Commission
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(a) the person’s employer no longer required the person’s job to be performed
by anyone because of changes in the operational requirements of the
employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or
enterprise agreement that applied to the employment to consult about the
redundancy.
(2) A person’s dismissal was not a case of genuine redundancy if it would have been
reasonable in all the circumstances for the person to be redeployed within:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.
[5] The Respondent’s case was developed principally through the evidence of Ms Diana
Hawkins, the Respondent’s Human Resources Advisor; Mr Douglas Luscombe, Vice
President Business Development Asia Pacific; Mr John Taylor, who had previously held the
position Design Manager with the Respondent; and Mr Philip Young, Human Resources
Manager Asia Pacific.
[6] The Respondent experienced a significant market downturn across its Australian and
international operations in 2012 and initiated a review of its operations in August 2012 as a
consequence. Mr Luscombe provided evidence about the market conditions and how he
became aware of the developments through his understanding of budget forecasting and
revenue streams.
[7] The Respondent argues that the Applicant was underutilised since December 2012
when the (West African) project on which he was working was completed, and there were no
new projects in the Respondent’s Australian operations to which he could be allocated and no
vacancies on any existing projects. Ms Hawkins had added that “no significant work was
obtained or commenced in the Respondent’s Australian operations from the start of the review
[August 2012] to the Applicant’s eventual redundancy on 1 March 2013.”
[8] This was the evidence, in effect, of Mr Luscombe, Mr Taylor and Ms Hawkins. It
provides an important further insight into the market conditions and the labour requirements
that the Respondent faced at the time of the review.
[9] By September 2012 the utilisation of the Brisbane office had fallen to a five year low
and a demobilisation plan was issued mid that month.
[10] The Applicant was advised in October 2012, along with other employees, that the
Respondent’s workflow had decreased and that a reduction in costs would be necessary.
[11] Meetings were held with Brisbane staff on 14 December 2012, 23 January 2013 and
12 February 2013. Redundancies were said by Mr Luscombe, who presented at the meetings,
to have been discussed at each of these meetings.
[12] Between August 2012 and March 2013, the Respondent’s Brisbane office decreased
its staffing count from 156 to 71 employees.
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[13] As at November 2012, the Respondent contends that it had some 4 employees whom it
engaged in Senior Designer - Mechanical roles. Two of these were said to be contractors and
two were employees. One of the employees was the Applicant. Another was a person who
departed voluntarily in November 2012 on an unpaid career break to perform services with
another employer (and with no guarantee of re-employment).
[14] Between February and March 2013 the Respondent made all the Senior Designer -
Mechanical roles redundant. The order of dismissal was based on the volume of billable work
and the due dates for deliverables. In effect, the order of dismissal was determined by
commercial considerations, not individual merit. The various positions ceased in a staggered
manner across a three week or so period of time.
[15] The position of Senior Designer - Mechanical, is not currently filled by any person in
the Brisbane office. A more junior position continues to be performed by a permanent
employee who was promoted into that role.
[16] The principal point of dispute between the Applicant and the Respondent is whether or
not the Respondent met the requirement of s.389(2) of the Act.
[17] The Applicant contends that the Respondent did not take the requisite steps to explore
the viability of redeployment within the Company structure.
[18] The Applicant contends that he met with Ms Annelies Long on 27 February 2013. Ms
Long is no longer an employee of the Respondent as her position was made redundant from
the Brisbane office in June 2013. Though she swore an affidavit for these proceedings she
was unable to attend as she was abroad at the time of the hearing. The Applicant claims that
Ms Long had indicated to him that there were “plenty” of jobs in Toronto, Canada.
[19] The Applicant contends that a number of positions advertised by the Respondent “as a
group” were positions for which he was qualified. He is of the view that there were a number
of externally and internally advertised positions to which he could have been redeployed. One
of these roles was as a CADD Designer. This position was located in Marlborough,
Massachusetts in the USA and was said to be an urgent requirement which gave preference to
local candidates. Another position was a CAD Technologist. This position was based in
Calgary, Canada. Local candidates were again preferred for this position. A further position as
a Project Leader, Mechanical and Piping, was located in New Caledonia (and required a
proficiency in the French language - both written and spoken - as a pre-requisite). Another
position was identified by the Applicant as a Systems CADD Technician/Designer. This
position was based in Toronto, Canada. The Applicant also highlighted a further position
based in Toronto as an Engineering Assistant. The position required a college diploma. The
Applicant has no diploma or degree level qualification.
[20] There may be other positions that were available internationally for which the
Applicant believed himself to be capable of filling.
[21] Ms Hawkins stated that Ms Long had informed her that the situation in Canada was
quite the opposite from that which the Applicant claims Ms Long had described to him. Ms
Hawkins possessed her independent knowledge that there had been a downturn in work in the
Canadian office and redundancies were being made. Ms Hawkins had also seen minutes of the
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Global M&M Monthly HR Conference Call (dated 28 March 2013) which had showed over
600 employees had been made redundant from the Toronto Office.
[22] Mr Luscombe’s evidence was along the same lines, broadly.
[23] Ms Hawkins was also confident that Ms Long had raised the prospect of redundancies
in Australia with overseas HR Offices in the hope they may seek to re-employ Australian
staff. She was confident of this because she had seen the minutes of the Global M&M
Monthly HR Conference Call for 9 November 2012. These minutes, Ms Hawkins claimed,
recorded that redundancies were occurring in the Australian office, and that HR managers
should first contact the Australian office to see if a redundant employee could be re-
employed. I have no reason at all to disbelieve Ms Hawkins’ evidence, which was given in a
professional and dispassionate manner.
Consideration
[24] The evidence as led by the Respondent demonstrates that the Respondent no longer
had a position of Senior Designer – Mechanical in its Brisbane office that it wished to fill.
[25] All four of the positions have been made redundant.
[26] The circumstances affecting the Company’s operations were stark and the downsizing
of its staffing levels in a period of some six months had led to more than a 50% reduction in
the headcount.
[27] On the evidence available to me there can be no dispute that the Applicant’s position
as Senior Designer - Mechanical was made redundant for the purposes of s.389(1)(a) of the
Act.
[28] The Applicant’s position is not one that is covered by a Modern Award or an
enterprise agreement and as such no obligation to consult in the context of such instruments
arises. There was no contest on this front between the parties. Mr Luscombe’s evidence did
demonstrate, nonetheless, that there had been a series of meetings with employees about the
demobilisation and the pending redundancies. This was not contested by the Applicant. No
issue arises in respect of s.389(1)(b) of the Act as a consequence.
[29] The Respondent also is required, by way of s.389(2)(a) and (b) of the Act, to seek the
redeployment of an otherwise redundant employee to the extent that it is reasonable in the
circumstances. What are the circumstances?
[30] There were no further Brisbane-based positions into which the Applicant could have
been redeployed. It matters not that a more junior employee continued to perform a role as a
Designer - Mechanical. That was not a position into which the Applicant could have been
redeployed at the expense of the employment of its incumbent. That is, the position as
Designer - Mechanical was not a vacant position into which the Applicant could have been
redeployed (without displacing the incumbent or circumventing his promotion).
[31] The wider evidence on the part of various witnesses for the Respondent (Messrs
Taylor and Luscombe and Ms Hawkins), as set out above, was to the effect that there was no
new Australian work or contracts and there were no vacancies on existing projects.
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[32] I think the evidence as referred to above is insufficient to meet the exclusionary
statutory test of s.389(2) of the Act. That test means the Applicant’s dismissal was not a case
of genuine redundancy (assuming satisfaction of s.389(1)(a) and (b) of the Act) if it would
have been reasonable in all the circumstances for the Applicant to have been redeployed
within the employer’s enterprise or an associated entity of the employer.
[33] It is not incumbent upon the Respondent in these particular evidentiary circumstances
to attest in terms of greater particularity than it has. It is a reasonable inference to draw from
the evidence that there were no other positions locally (Australia-wide) into which the
Applicant could have been redeployed. If there had been evidence that the downturn had been
less pronounced or severe, or patchy or uneven or just plain questionable, more may have
been required. Or if the genuineness of the witnesses’ claims had fallen into question, more
particularity might have been anticipated. But the evidence I have heard was genuine and
dispassionately given, informed on a sound basis, and it was cross-corroborated by the
various witnesses’ perspectives into and across the business.
[34] On the evidence before me, therefore, it would not have been reasonable in the
circumstances for the employer to take steps to redeploy the Applicant. Plainly, the market
conditions made efforts to redeploy the Applicant (beyond those as described) an
improbability, if not a futile procedural gesture.
[35] That said, the Applicant pressed that it would have been reasonable in the
circumstances to redeploy him, who (had) held a position in Brisbane, to an international
position in an associated entity of the employer.
[36] The Applicant’s case seemed for the most part to focus on this expectation
exclusively. That is, the Applicant claims that as he was of the belief that there were positions
available within the company in international locations, the Company should have taken steps
to redeploy him to those positions. And because they did not do so, the Applicant claims the
Respondent has failed to make out the (effective) exclusionary requirement under s.389(2) of
the Act, and his application must therefore be taken to be jurisdictionally competent.
[37] But there is no basis for a claim that it would have been reasonable in the
circumstances for the Respondent to have redeployed the Applicant to an international
location. I have said as much earlier in respect of the labour market conditions. But there are
further reasons as well.
[38] Firstly, the Respondent has never held out that it has a facility to redeploy redundant
employees to international locations (even if any such appropriate positions were identified).
There can be no reasonable expectation on the part of the Applicant that this was the case.
[39] Mr Young gave uncontested, detailed evidence of the ad hoc arrangements whereby an
employee who was made redundant might identify and apply for a position overseas, meet the
stated requirements, resign their position with their local employer (and not be paid
redundancy pay), and then relocate entirely at their own expense. But such outcomes are not
established practices, and the Respondent might at best assist informally in facilitating
applications and so forth, but little more. This is not a redeployment process.
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[40] Redeployments (proper) by employers also ordinarily incur significant relocation
expenses on the part of the employer. An employer would be obliged to consider the financial
burden of relocation arising from redeployment to an international position (or even one
interstate) for the purposes of s.389(2) of the Act. Such circumstances would inform the
reasonableness of redeployment.
[41] Other difficulties arise in respect of overseas entities within a company group where
those entities operate their own distinct human resource functions, policies and procedures,
and there is no overriding central managerial control. This was the evidence of Mr Young in
respect of the current circumstances. Ms Hawkins gave evidence that such overseas business
units are focused on their own local recruitment, in any event.
[42] The Full Bench in Ulan Coal Mines Limited v Honeysett and others1 has suggested
that issues such as whether there is central management control over associated entities by a
single member of the Company group will be relevant to whether an employee should apply
for the available position rather than be redeployed to the position.
[43] Generally, it is not reasonable in the circumstances for the Respondent to redeploy the
Applicant to an overseas location to take up a new position in such circumstances.
[44] There are a number of difficulties that arise in respect of the interaction between the
discretionary notion of the reasonableness of redeployment (commonly seen as a substitute
for the payment of redundancy pay and dismissal) under s.389 with the jurisdiction in relation
to varying redundancy pay obligations (under s.120 of the Act).
[45] The Commission has established a line of authority through various Full Bench
decisions over a lengthy period of time (from Clothing and Allied Trades Union of Australia v
Hot Tuna Pty Ltd2 and Derole Nominees Pty Ltd and the ACM)3 regarding what is and is not
acceptable alternative employment (or currently “other acceptable employment”) for the
purposes of exempting an employer from the obligation to pay redundancy pay, or modifying
the obligation.
[46] The test established by the Commission as to whether alternative employment is
acceptable is an objective one, relying on comparisons of like terms and conditions, similarity
of wage escalations, seniority, job security, career pathways, preservation of service
entitlements, inconveniences, distance from residence or location, health and safety risks, the
effect on family responsibilities, along with other factors further.4 I note that a failure to
redeploy an employee to a lower paying job sought by the employee, however, has been
found by a recent Full Bench to constitute a failure on the part of an employer to redeploy the
employee for the purposes of s.389(2) of the Act.5
[47] That said, further difficult issues would arise where the “redeployment” (if it could be
so defined) were to a position where foreign country terms and conditions of employment
apply (which may also affect employment security etc). Other factors as cited above would
1 [2010] FWAFB 7578 at PN35.
2 (1988) 27 IR 226.
3 (1990) 140 IR 123 onwards.
4 See for example [2007] AIRC FB 1016.
5 [2011] FWAFB 9137. See also [2010] FWAFB 7578.
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also be relevant to the objective determination of the acceptability of the alternative work for
the purposes of s.120 of the Act, in any event.
[48] Other issues arise in relation to international redeployments concerning whether the
contract of employment (or the employment relationship) could survive such a putative
redeployment. Decisions made under s.120 of the Act are often understood to be a proxy for
such findings.
Conclusion
[49] The Applicant’s dismissal therefore was a case of genuine redundancy for the
purposes of s.389 of the Act. Further, his dismissal is not excluded from being a genuine
redundancy for reason that it would have been reasonable in the circumstances to redeploy
him (in the manner stipulated at s.389(2)(a) and (b) of the Act).
SENIOR DEPUTY PRESIDENT
Appearances:
Mr L. Cudmore, for the Applicant.
Mr R. Young, HR Manager, for the Respondent.
Hearing details:
Brisbane
2013
20 September
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